Upload
rai-university
View
94
Download
4
Tags:
Embed Size (px)
Citation preview
ETHICS & CSR
1
Course: MBA-ISubject: MARKETING MANAGEMENT - 1Unit: V
Background
Sweatshops and child labor overseas, with horrible working conditions.
Accusation: targeting low-income families by making shoes an expensive status symbol for poor urban street kids.
Nike responds by…
Implementing a companywide ethical code of conduct
Commissioning an independent study of Nike factories abroad
Creating a huge social responsibility department
Donating more than $37 million to sports programs and 3 percent of earnings to charity.
NIKENIKE – Socially Responsible? – Socially Responsible?
Ethical Criticisms of Marketing High prices Deceptive practices High-pressure selling Shoddy, harmful, or unsafe products Planned obsolescence Poor service to disadvantaged
consumers
High Prices Caused by:
High costs of distribution
High advertising and promotion costs
Excessive markups
(greed & profit pressures)
Why do branded products cost more than generics (i.e. store brand)?
The cost of advertising?
Deceptive Practices Deceptive Pricing
Falsely advertising “factory”, “wholesale”, “clearance” or other seemingly large reductions from a phony high original retail (list) price.
Deceptive Promotion Overstating a product’s features or performance, running
rigged or fraudulent contests. “Bait-and-Switch” advertising
Deceptive Packaging Exaggerating package contents through slick design,
misleading quantity or quality imagery and misleading labeling
High-Pressure Selling Salespeople are trained to deliver
smooth, canned talks to entice purchase. High-pressure selling persuades people to
buy goods they neither need nor want. Driven by compensation structures (i.e.
high bonus potentials). High-pressure selling ultimately destroys
customer relationships and goodwill.
Includes Poorly made products Products that do not perform well Products that deliver little benefit Harmful products (cause bodily harm, illness, even
death)
How it happens Undue focus on profit, increased production complexity,
poorly trained labor, and poor quality control New products without safety track records Outsourcing of production often leads to quality issues
Shoddy or Unsafe Products
McDonald’s and Obesity
A 2002 lawsuit unsuccessfully sued McDonald’s on behalf of obese children, claiming McD’s marketed food that is high in “fat, salt, sugar, and cholesterol.”
Planned Obsolescence Refers to: Products needing replacement before they should
because they are obsolete. (computers and software)
Producers who change consumer concepts of acceptable styles. (clothing and fashion)
Intentionally holding back attractive or advanced functional features, and introducing them later to make the old model obsolete. (electronics)
How do consumers attempt to combat Planned Obsolescence?
Examples The poor are forced to shop in smaller
stores where they pay more for inferior goods.
The poor receive worse service (or no service) at stores.
“Redlining” by national chain stores in disadvantaged neighborhoods.
Poor are targeted for “rapid refunds” and other “quick-money” swaps.
Poor Treatment of Disadvantaged Consumers
Marketing’s Impact on Society as a Whole
Marketing creates false wants and needs
Marketing makes people materialistic
Marketing promotes poor quality products
Cultural Pollution
Does constant exposure to advertisements assault our senses?
Consumerism
Consumerism is an organized Consumerism is an organized movement of citizens and movement of citizens and
government agencies to improve government agencies to improve the rights and power of buyers in the rights and power of buyers in
relation to sellers.relation to sellers.
Buyers have the right to:1. not buy a product offered for sale.2. expect the product to be safe.3. expect the product to perform as claimed.4. be well informed about important aspects of the
product.5. be protected against questionable products and
marketing practices.6. influence products and marketing practices in
ways that will improve their “quality of life.”
Buyers’ Rights
Sustaining the environment while producing profits for the company.
The “Triple Bottom Line” Levels of environmental sustainability:
Pollution prevention Product stewardship New environmental-friendly technologies Sustainability vision
Environmental Sustainability
Environmental SustainabilityThe Dell recycling program helps customers recycle or donate old computer equipment.
Societal Classification of Products
Global Marketing Ethics Business standards and practices vary
greatly between countries. Bribery and kickbacks are illegal in the U.S., but are legal
and even standard business practice in other countries.
Should companies maintain a consistent set of ethical standards to be used worldwide?
Corporate Social ResponsibilityObjectivesObjectives
• Understanding the basics and fundamental principles of Corporate
Social Responsibility (CSR)
• To appreciate the impact of CSR on businesses
• To discuss how CSR initiatives can benefit businesses
Corporate Social ResponsibilityDefinitionDefinition
What is Corporate Social Responsibility?
CSR! Is that really for me? So
technical, very expensive!!
I’m overwhelmed
Corporate Social ResponsibilityDefinitionDefinition
What is Corporate Social Responsibility?
‘Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large’.
– World Business Council For Sustainable Development
Corporate Social ResponsibilityDefinitionDefinition
What is Corporate Social Responsibility?
The responsibility of business towards the society
Corporate Social Responsibility
Corporate Social ResponsibilityDefinitionDefinition
Our Definition
A voluntary initiative on the part of a business to contribute to a better society and a greener and
cleaner environment.
Corporate Social ResponsibilityDefinitionDefinition
Analysis of the definition by the World Business Council For
Sustainable Development
• Expectation of stakeholders that companies
should behave ethically
• Expectation that business should contribute to
economic development
• Expectation that business should improve the
quality of life of its workforce and their families
• Expectation that business should play active part
in the improvement of the society
CSR in South Africa
Corporate Social Responsibility
Corporate Social ResponsibilityPast, Present and Future Trends Past, Present and Future Trends
CSR IN SOUTH AFRICA
Past Trend –
Pre 1994
Present Trend –
Post 1994
Future Trend
CSR Myths, Legislation and Benefits
Corporate Social Responsibility
Corporate Social ResponsibilityMyths surrounding CSR
CSR is not for small businesses
It is too complicated and technical
It is too expensive
It is a market gimmick
It is a separate corporate initiative
Corporate Social ResponsibilityLegislative Framework Legislative Framework
Companies Act 71 of 2008
King III
BBBEE Act 53 of 2003
Corporate Social ResponsibilityBenefits of CSRLegislative Framework
Benefits of CSR
Winning new businesses
Enhancing your influence in the
industry
Attracting, Retaining and
Maintaining a happy workforce
Increase in customer retention
Differentiating yourself from the
competitor
Saving money on energy and operating cost
Access to funding opportunities
Media interestand goodreputation
Ben
efits
Ben
efits
Enhanced Relationship with
stakeholders
REFERENCES• PHILIP KOTLER (BOOK-MARKETING
MANAGEMENT - CHAPTER-20)